If marginal revenue equals marginal costs and total revenues exceed variable cost, then the business should: A) shut down B) stay open C) neither A or B

The answer is (B) stay open.

When the marginal revenue of a firm equals its marginal costs, we say a firm is maximizing its profit. This is because increasing output by a unit would decrease the profit, while at a smaller output, each other unit would increase the profit. At a point that maximizes profit, the revenue should be larger than the variable cost so that business continues its activity. Otherwise, the business should be shut down. This rule applies to decisions made in the short run.